The annual property tax is calculated on the property's assessed value, not its market value. First, calculate the assessed value by multiplying the market value by the assessment ratio ($630,000 x 50% = $315,000). Next, apply the tax rate. Since the rate is $32 per $1,000 of value, divide the assessed value by 1,000 to find the number of taxable units ($315,000 / $1,000 = 315). Finally, multiply the number of units by the tax rate (315 x $32) to determine the annual tax assessment, which is $10,080.

A. $4,032: This figure results from a mathematical error in the calculation process and does not correctly apply the tax rate to the assessed value.

B. $8,064: This is double the amount in option A and represents a significant miscalculation, not following the standard formula for property tax assessment.

D. $20,160: This is the result of incorrectly applying the tax rate to the full market value ($630,000) instead of the correct assessed value ($315,000).

1. North Carolina Real Estate Commission. (2023). North Carolina Real Estate Manual. Chapter 6, Real Estate Taxation, pp. 6-4 to 6-5. The manual details the formula for calculating ad valorem property taxes: Assessed Value × Tax Rate = Annual Taxes. It specifies that the assessed value is derived from the market value and the locally established assessment ratio.

2. McLaughlin, C. B. (2017). Property Tax in North Carolina. UNC School of Government. Chapter 1, An Introduction to the Property Tax, p. 3. This publication states, "The amount of tax due on a parcel of property is the product of two factors: (1) the property’s assessed value and (2) the tax rate." This confirms the two-step process of first determining the assessed value before applying the tax rate.

3. Galaty, F. W., Allaway, W. J., & Kyle, R. C. (2022). Modern Real Estate Practice. 21st Edition. Chapter 10, Real Estate Taxes and Other Liens. This academic textbook outlines the standard industry procedure for calculating property taxes, explaining that the tax is levied on the assessed value, which is a percentage of the market value, and then multiplied by the established tax rate (mill rate or per $100/$1,000).